Challenge question I. Michael is shopping for a special automobile. He finds the exact car...
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Accounting
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I.
Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This car is currently the property of a neighbor, so to buy it for the agreed-upon price of $50,000, Michael must secure his own financing. He visits four different financial institutions and gets the following available loans:
Bank 1:48 monthly payments of $1208.95
Bank 2:60 monthly payments of $990.06
Bank 3:156 weekly payments of $356.85(Assume a 52-week year.)
Bank 4: 24 quarterly payments of $2624.88
Which loan should Michael take?Hint:Which loan has the lowest EAR?
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